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Sunday, June 3, 2012

High Tech Worker Shortage: Has Anything Changed?

Where is the talent ?

Alarm bells over the lack of high-tech workers in the U.S. have been ringing for years, turning the story into near-legend. ut is the worker shortfall still a fact? While a consensus is elusive, many industry experts say yes, and the problem is growing.

"When I hear from employers that there is a shortage, I believe them," says Steve Langerud, director of professional opportunities at DePauw University and a workplace consultant.

"Firms know how real it is. They see how much money it costs them by having to pay a premium for talent, and they see the money lost in services they cannot provide to clients because they don't have workers," adds Langerud.

The long-term scarcity springs from a deficient educational system, says Terry Howerton, managing partner of TechNexus, a tech incubator firm based in Chicago.

"There's been a lack of emphasis at U.S. high schools on tech education and career paths for some time," Howerton says. "Most colleges will tell you the low number of computer science students coming in is related to the shortage of graduates coming out in this field."

Concern over the high tech shortage dates to the 1980s, with a crescendo of alarm hitting in the late 1990s and early 2000s. The issue is heating up again as more companies embrace the advanced manufacturing model.

For Bob Slapin, executive director of the San Diego Software Industries Council, time has only made conditions worse.

"We've been dealing with the lack of workers over the years, but not like this," Slapin said in an email. "We currently have more than 5,000 openings, tech job openings in San Diego, that we can't fill. There is a severe shortage."

The lack of IT skill sets in particular is what's keeping many tech firms from finding the workers they need, says Ed Nathanson, director of talent acquisition for the IT security firm Rapid7.

"Skills for Java, Hadoop and Ruby [programming languages] are in great demand, but there's not enough available pool talent for them," Nathanson says. "That's why there's a lot of competition for those who do have those skills."

But it's not just finding workers with the right tech skills, says Lauren Burris, human resources director at Practice Fusion, an online electronic health records site. Some firms like hers have specific cultural needs as well.

"There's been more difficulty lately in finding candidates that are well rounded and not just an expert in their field," Burris says. "Our mission is to save lives, and all of our employees are driven by that. We don't always find those people."

To solve this lack of home grown workers, some industry analysts want revisions in U.S. worker immigration rules to let more foreign trained tech workers fill the void. Currently, some 200,000 foreign workers with science, technology, engineering, and mathematics degrees are allowed into the U.S. each year through various work visa programs.

A "reasonable" change in immigration laws — to allow more foreigners in with high tech degrees — can bridge the worker gap, says Arun Sundararajan, a professor in New York University's School of Business.

"Good immigration policy can be used selectively as a way to get newer and hard to find IT capabilities," contends Sundararajan. "It won't solve the entire shortage, but you can hire higher quality IT workers globally."

The inability to fill jobs in the U.S. has created a high-tech worker's market. The current rate of unemployment for technology workers is around 4 percent, about half the overall jobless rate, according to the Bureau of Labor Statistics.

There's also higher pay. The average salary range for a new tech hire is $80,000 to $120,000 a year, higher than many other fields.

But if workers are scarce and come at a high price, that hasn't stopped some high tech firms from hiring the people they need.

"We think there's an abundance of talent right here in the U.S.," says Jerry Irvine, CIO at Prescient Solutions, an IT outsourcing firm based in Chicago. "It's taking longer to find it but we are."
Prescient, with its 84 employees, made a conscious decision to make Chicago its headquarters, says Irvine, in order to avoid the usual high tech regions like Silicon Valley — and have access to a broader workforce.

Another small firm, Cleversafe, which provides data storage, did the same, says CEO and founder Chris Gladwin. And that's paid off when it comes to hiring.

"We wanted to locate outside of traditional talent clusters but close to academia," says Gladwin. "We have great relationships with local Chicago colleges and universities and established a strong culture of innovation. When you do that, the talent pours in."

For those firms losing out in the talent search, one analyst says the problem is not so much a shortage of workers but how they and prospective hires are connecting.

"Workers and employers are surprisingly having trouble finding each other in this high tech age," says Bala Iyer, a professor of information technology management at Babson College.

"Companies are looking for employees using traditional methods, and it's not working. Employers should be scouring digital communities and new markets for people," says Iyer.

Even if they do make the right kind of hook-up, many tech firms have to slug it out against their more glamorous colleagues for new hires, says Larry Scinto, IT strategy specialist at PA Consulting group.

"The best and brightest are going to the Facebooks and other start-ups where they have a shot at becoming millionaires," Scinto adds. "Going to a traditional tech firm may seem boring and could mean a short career and eventually being outsourced."

It's estimated that by 2018, there will be some 1.4 million tech-related job openings in the U.S., but the country will have only about 400,000 college grads to fill them.

If that equation seems one-sided now, the shortage of high tech workers, for whatever reason, will just keep getting worse, says Alex Camino, vice president of marketing and communications at Softek, an IT solution firm.

"Almost every industry is being transformed by technology," Camino says. "Banking is online, smartphones are replacing cameras. Music, publishing are online. Television is high tech. You name it, and IT has to be part of a company's strategy. So when it comes to workers, demand just keeps outpacing supply."